Although a decision for full council the council's cabinet has to recommend a rent increase for council tenants. As I outlined at the council cabinet meeting earlier this is not something that can be done easily at the moment. Inflation is still over 5%, the government is recommending a 7.2% increase in rents (their rhetoric over hard pressed workers needing a break in council tax freeze apparently doesn't apply if that worker lives in a council house or flat) but at the same time pay rises in the private sector are averaging little over 2% and in the public sector pay freezes are the norm.
On top of that councils are about to take on a huge debt financed by no longer having to pay over part of their rents to central government. This is good news as I've blogged before but it does mean we need to be very robust about our business case for our housing service.
Having consulted with Reading's tenants representatives and looked hard with officers and fellow Labour councillors at what can be done my proposal to cabinet this evening was that we recommend a 4.5% average increase in rents, with this capped so that no tenant experienced a greater than 5.5% increase. This is below the rate of inflation but high enough that our business plan and improvements program are affordable.
It's not something I think anyone wants to do, put up an essential cost faster than wage rises but this is the real impact on the ground of a government that is so incompetent on the economy that inflation is running far ahead of wage rises. Even the most rabid critic of the council would find it hard to blame us for it locally but it is local decision makers who see people at the sharp end and know what it means for the real 'squeezed middle' that we hear so much about from the media now.
Not a decision to be made lightly next Tuesday but I hope that everyone will look at this as a balancing act between sustainability of our council housing and being fair to tenants whose wages are being squeezed.
Council press release below:
Below inflation rent increase proposed for council tenants
An average increase in rent of 4.5% for Council housing tenants, was recommended by Reading Borough Council’s Cabinet during a meeting at the Civic Centre last night.
Following the recommendation by Cabinet, a final decision will need to be taken by Council on January 24th, before a rent increase is introduced at the start of the new financial year in April 2012.
Last year the Council agreed a rent increase of 4.9% but Cabinet wishes to reduce this even further this year, being mindful of the increasing financial burden being placed on families and tenants living in the borough. The increase of 4.5% is below (RPI) inflation which is currently 5.2%.
The Council consulted the
independent tenants’ joint consultative committee about the proposed rent increases for 2012/2013, which asked that the increase be kept as low as possible and definitely below 5.5%. On average, the 4.5% increase in rent will add a further £4.28 on to the weekly household bill for Council tenants.
Rachel Eden, lead councillor for housing and neighbourhoods, said: “It is a difficult time for everyone with pay freezes or small wage rises for most people as well as worries about job security. Because of this, I am pleased Cabinet has recommended that the Council agrees a below inflation rent increase. However tenants also want the Council to remain their landlord so we need to ensure that our business plan works. This level of increase will also ensure that vital housing maintenance services continue, and mean we can continue to investment in further improvements in Council housing. If any tenant is concerned about their financial situation I’d urge them to contact us as early as possible.”
The report to Cabinet also highlighted the investment of almost £11.5m being made into further improving the Council’s housing stock during the coming year, which will be spent on improving the homes of many thousands of tenants.
The investment includes:
- £910,000 on kitchen and bathroom improvements
- £920,000 on external repairs and decoration such as roofs, vent pipes and guttering, brick work, windows and doors, porches and sheds
- £600,000 on improving the security of communal areas in blocks of flats
- £620,000 on special adaptations to the homes of tenants with disabilities
- £350,000 on rewiring
- £460,000 on major repairs, such as replacing fencing, flooring, damp treatments etc
- £130,000 on re-decorating works to 460 homes lived in by pensioners